The healthcare joint venture between Amazon (AMZN), Berkshire Hathaway (BRK.A) and JPMorgan (JPM) is looking at how to redesign health insurance, among other efforts, The Wall Street Journal's Jon Kamp and Anna Wilde Mathews report, citing newly unsealed court testimony from an executive at the health startup. Jack Stoddard, the COO of the startup, said in federal court in Boston last month that the JV is focusing on the complexity of health insurance and asking if it can "reinvent what insurance looks like in terms of benefit design?" Stoddard was in Boston last month for a hearing in a lawsuit filed by UnitedHealth's (UNH) Optum, which is seeking to stop a former employee from working for the venture. Reference Link

Magellan's most logical strategic buyer would be in managed care, says Stephens. After Reuters reported earlier today that Magellan Health (MGLN) is exploring a sale of the company amid pressure from activist Starboard Value, Stephens analyst Scott Fidel said he thinks the most logical strategic buyer would be in the managed care sector and he compiled a list of some companies he thinks could make sense as buyers, but cautioned that his list is "certainly not exhaustive." Anthem (ANTM), Humana (HUM), UnitedHealth (UNH), WellCare (WCG) and Centene (CNC) make Fidel's list of potential strategic buyers of Magellan and he sees various scenarios where the company could be valued at as low as $51 per share to as high as $106 per share in a takeout deal. Fidel keeps an Equal Weight rating and $68 price target on shares of Magellan, which are up $7.76, or 12%, to $72.78 in afternoon trading.

SVB Leerink analyst Ana Gupte says a takeout of Magellan Health (MGLN) "would be reasonable" up to $90 per share based on a sum-of-the-parts analysis. The stock in midday trading is up 10% to $71.28 after Reuters reported that the company is working with Goldman Sachs to gauge takeover interest. Activist hedge fund Starboard Value, which owns a 9.8% stake in Magellan, is likely to be pushing for a management shake-out, margin turnaround and eventual takeout by a strategic buyer such as Centene (CNC), Anthem (ANTM), UnitedHealth (UNH), WellCare (WCG) or Humana (HUM), Gupte tells investors in an intraday research note. The analyst suspects strategic buyers could pay a 25%-35% premium toward a takeout price of $90 to $95 per share post a margin turnaround. Gupte has a Market Perform rating on Magellan Health.

Tivity Health price target lowered to $29 from $44 at Piper Jaffray. Piper Jaffray analyst Sean Wieland lowered his price target for Tivity Health (TVTY) to $29 after accelerated insourcing by UnitedHealth (UNH) resulted in the company lowering its 2019 outlook. Recent checks with fitness clubs indicate that the process of transferring Silver Sneakers members to Renew Active by UnitedHealthcare is an administrative burden for the fitness clubs because they have to manually re-register the members, Wieland tells investors in a research note. Furthermore, the members must begin paying for the membership out of pocket, albeit at a 50% discount, adds the analyst. In addition, Wieland says he needs to see more evidence of revenue synergies to prove the rationale of Tivity's merger with Nutrisystem (NTRI). Nonetheless, the analyst keeps an Overweight rating on Tivity Health saying the stock is "too cheap."

Citi confident in Cigna earnings target after CEO meetings. After hosting investor meetings with CEO David Cordani, Citi analyst Ralph Giacobbe has confidence in Cigna's $20-$21 earnings per share target for 2021. The analyst continues to view Cigna as a "compelling story and stock." The company is his top pick and highest conviction name. He keeps a Buy rating on the name.

Jefferies views Quest selloff as overdone, but keeps Hold rating. Jefferies analyst Brian Tanquilut views the post-earnings selloff yesterday in shares of Quest Diagnostics as overdone. The analyst sees the company gaining share and driving volume growth this year as it gains UnitedHealth (UNH) market share, but he believes this is now baked into the stock. Management's guidance, while arguably more conservative than not, leaves little room for momentum-driving earnings upside surprises, Tanquilut tells investors in a research note. He lowered his price target for Quest to $93 from $96 and keeps a Hold rating on the name.

Quest Diagnostics selloff yesterday a buying opportunity, says Mizuho. Mizuho analyst Ann Hynes recommends buying shares of Quest Diagnostics (DGX) following yesterday's 5% post-earnings selloff. The weakness related to confusion around not being a "preferred" in-network provider for UnitedHealth (UNH) currently and the initial 2019 guidance only setting a minimum range of "greater than $6.40" versus consensus of $6.56, Hynes tells investors in a research note. However, she thinks Quest "set the bar low to be able to beat and raise throughout the year." The analyst maintains a Buy rating on the shares with a $106 price target.